Transcript: Fu Ying

26/09/2015

Lisa Owen: Well, this week panda diplomacy hogged the headlines. Amidst the debate about the push to bring giant pandas to Wellington, a top Chinese foreign affairs official paid her first formal visit to New Zealand. Madam Fu Ying is the chair of the foreign affairs committee of China's all-powerful National People's Congress. Her top-shelf credentials include stints as vice foreign minister and ambassador to the UK and Australia. When I sat down with Madam Fu Ying in Auckland this week...I began by asking about the China-led Asian Infrastructure Investment Bank that New Zealand is contributing to and how China views New Zealand. She told me that while New Zealand may be small it is unique among developed nations.

Madam Fu: I've found that New Zealand has been very consistent in its policy towards China, promoting cooperation and addressing the difficulties when they arise, addressing very swiftly, effectively, so we find New Zealand a reliable partner. For China, one very important foreign-policy principle is that countries big or small are equals, so between all countries, like brothers.

What opportunities are there for our two countries to work together?

The opportunities and challenges are all new for China and probably for New Zealand. For example, China's trade with New Zealand rose with a strong momentum after the FTA, but now it's slowing down; it's even falling, the bilateral trade. As a matter of fact, China's international trade has been slowing down for the past few years, and it's affecting China-New Zealand trade the first half of this year. So New Zealand - both New Zealand and China need to be aware of the new trend. China's economy is slowing down; the growth is slowing down. It's in a changing-gear period, the economic structure is undergoing transformation from, for example, labour-intensive to maybe technology – more value added – direction. It's a very difficult transition. We are undergoing deeper reforms. We hope that New Zealand will be aware and will go along with this trend and move into a higher level of cooperation with China. The Ambassador told me that from July last year to July this year, Chinese tourism has been rising with a very strong momentum, so the whole economic structure and lifestyle in China are changing. The services sector and the consumer, consumption sector in China is rising, so we hope our relationship will move along with the tide to a higher level. We are already discussing the upgrading of our FTA. I hope we'll soon launch the negotiations which will help our relationship in that direction.

You mentioned already the Asian Infrastructure Investment Bank. With so many other international bodies, why did China see the need for this bank?

Very good question. It's raised in other parts of the world too. The infrastructure development for the developing world, for Asia, has always been the focus, and in China over the past decades, one of the most important success in China's economic roles is very strong infrastructure development. China realises that the whole region and even other parts of the world, needs infrastructure development, and the bottleneck, the bottleneck has always been the funding side. We have, for example, World Bank, we have Asian Development Bank, but most of them are focusing on poverty alleviation, from which China also benefited greatly, but there's no special financial support for infrastructure, and China would like to make that support, but we cannot do it alone.

Well, China has growing clout – both economic power but also on the international stage. So what do you see as China's role in the Asia region?

Hmm, I think China's main emphasis, focus is still domestic. There is strong economic growth, but we need to be aware that there is a big disparity in the development between the east and west; the rich and poor; the cities and countryside. So in a long time to come, I think China's potential and China's focus would all be within the country. The effort would be mainly on how to further improve the livelihood of the people. In the meantime, as China's economic strength is growing and also because of the fact that China has benefited greatly from the region and from the world in its development, it will and it should play greater role in the region and in the world but I believe mainly in areas where China is good at, for example, China is strong in infrastructure development, so it will be able to provide more public goods in this area.

Because you will be aware, Madam Fu Ying, that some people look at China and think that it is competing, maybe, with the United States to be the big boss in the Asia-Pacific region. What is the case?

True, there is such talk, but I think China sees the world in a different angle. We, as I mentioned at the beginning, that we see all countries as equals; we think the relationship among countries should be based on equality, mutual benefit and mutual respect. So we don't want to boss on others, just as we have not accepted the boss on us. So we hope the Asia-Pacific, China, US, would all be in a relationship of cooperation. If there are difficulties we should discuss. We should solve them, seek to solve them. If we can't solve them, we can maybe shelve them.

Because some of the language is language of containing China, or keeping China under control.

Yes, there are such a talk. It is Euro traditional power politics language. I think, for example, China-US – US is the biggest developed country, very strong – the strongest power in the world. US has lots of advantages, and China has a lot to learn from the United States. China is the biggest developing country. It's still confronted lots of challenges, although it has made strong progress. And in the relationship between China-US, there is a great interdependency. The trade – bilateral trade – is US$555 billion – very big. So it's a very very strong relationship.

But also a complex relationship too.

True, true. There are differences.

So for a country like New Zealand, who is friends with both America and China, is there a worry that New Zealand will have to choose between those friends?

China believes that if there are differences between countries, we should discuss them or we can put it aside. We should move in a positive area. But US sometimes may want China to just accept. That's sometimes difficult for China. As for New Zealand, I don't think there is a question of choosing. New Zealand can agree with China; can disagree with China; it can agree with US or disagree. It's for New Zealand to choose. But I don't think the relationship or difficulties between China and the US will affect China's relationship with New Zealand in any way – not at all. They are very separate relationships. And in the whole world, the general trend in the China-US relationship is cooperation, and the world stands to gain in China-US cooperation. If we have very serious conflicts of interests between China-US, it'll hurt the region, hurt the world as well. So China-US needs to be careful too in managing their relationship.

Because New Zealand has deep relationships with a number of Asian countries, so, for example, any tension over islands in the East and South China Seas are a concern for us. So how does China see that dispute being resolved?

Actually, it's not a dispute. The disputes existed when China started joining the regional cooperation in the '90s. But we managed to have a kind of consensus among the ASEAN countries and China and also between China and the independent—the separate disputed countries. But the recent tension started by some provocations, which are of our concern as well, and I think China has to react and react swiftly and clearly to the countries who wanted to — who challenged China in the region. But in the meantime, we have not given up – we have not given up the fundamental principle of seeking solution to the dispute through peaceful dialogues and maintaining regional peace and stability through dialogues. That's the fundamental stand of China's.

Lisa Owen: You're back with The Nation...and we're returning to our interview with Madam Fu Ying, chair of the foreign affairs committee of China's National People's Congress. I asked her how China reconciled its position of peaceful development with reports it's building a third airstrip in disputed waters in the South China Sea.

Madam Fu: We don't see it contradictory, because we are building, we are having constructions on our own territory – on our own island and shores. We are not affecting, we are not infringing upon the interests of anybody at all.

Obviously the other countries, Madam Fu Ying, would dispute that. Many other countries claim rights to that area as well. And you spoke of provocation, so they may also regard that as provocative behaviour.

I think China is - over the past year China's reacting to the development around the disputed islands in the South China Sea. China talked on many occasions with the ASEAN countries to be able to disciplinise their own members, to abide by the DOC we agreed upon, and many of those members of ASEAN countries did not abide by what they agreed with us. But, as I said, the end purpose is to make sure that the peace and stability lasts. And China on the one hand needs to be able to respond to provocations. On the other hand China should not give up hope of coming back to the agreement China and ASEAN countries agreed on to maintain peace and stability in the region and to pursue dialogue, to pursue solution of the problems through dialogues.

How concerned is China about Japan building its military?

I think in China-Japanese relationship, the biggest concern is their attitudes on history. The Japanese Prime Minister and to some extent certain sectors in Japan, I think they are reluctant to admit that there was a crime committed during the war, and they are reluctant to come to terms with the feeling in China about the war. This is 70 years anniversary of the victory of the Second World War. And without a kind of reconciliation on the war crimes, I think there's always a difficulty. I think it's very difficult for China and Japan to—I think for the relationship to move smoothly. This is a painful, painful wound in the relationship which comes up again and again because of the rhetoric, because of the attitude, because of the– sometimes the behaviour.

Let's talk about New Zealand and China. New investment rules in China means that Chinese citizens are potentially going to have more money to invest offshore – trillions of dollars, perhaps. How interested do you think they will be in investing in New Zealand?

I think China has come to that stage, after years of being a main attraction of international investment, which we're still making an effort to make sure that we're attractive to international investment. At the same time, China has accumulated foreign capital too, and China is able to invest abroad. Chinese companies, Chinese individuals are very interested in investing abroad. New Zealand, the Ambassador told me that more and more companies are coming in this way to look for investment opportunities. And New Zealand has been, has been regarded as a very good place for investment. There is consistent policy, and there is also, I think, political messages from New Zealand about welcoming Chinese investment.

Do you think that that message might be mixed, though? I mean, the main opposition party sparked a lot of debate here in New Zealand when it released data showing that a large number of people with Chinese surnames had bought properties in Auckland specifically. Do you have any concerns that Chinese people are becoming a political target here?

I hope not. I hope not. The Chinese citizens are buying properties, for example, in London, in US – even in Fiji I was told that there is growing interest. I think—I hope the Chinese investors – companies, individuals – wherever they are, should abide by the rules and laws of the countries concerned. On the other hand, we also hope that the countries have a fair attitude towards Chinese investors. They are like from any other country, and they should be respected as well.

Because, Madam Fu Ying, there was a recent decision, in respect of Lochinver Station that a Chinese company wanted to invest in. You talk about the rules being applied fairly to everyone. Is it felt that the rules were applied fairly in this case when this was turned down as an investment?

I'm sure it was a big disappointment to the investor. When I was in US, visiting the US two years ago, there was an investment by a Chinese private company – to buy Smithfield, the pork-producing company in US -- US$7 billion. And there was a debate in the parliament too. We talked with them, we explained to them what kind of company that was. But the investment was accepted. They are doing very well now in the United States. So I don't see why Chinese investors cannot be successful here. But I can't comment on your domestic politics. But I hope the message is clear and consistent, because if it's a mixed message, people will wonder is it a good investment place or not? Generally speaking, I think New Zealand has a very good reputation in China, and we hope you value that.

Thank you so much for joining us, Madam Fu Ying. We appreciate your time.